A woman passes a sign encouraging people to wear masks in Melbourne Photograph:( AFP )
The increase in the number of cases come amid reports of slow vaccination in the country with 75,000 people being vaccinated per day
Melbourne entered into a seven-day lockdown on Friday after new coronavirus clusters were discovered as Australia grapples with news cases of the virus.
The lockdown in Melbourne started from midnight on Thursday (14:00 GMT) with residents asked to stay home. Reports say the outbreak began after a traveller returned to the country with the variant first found in India.
Victoria's acting Premier James Merlino said: "With 10,000 primary and secondary contacts of cases, with more than 150 exposure sites right around the state of Victoria, we need to act now."
The government has restricted home gatherings with only 30 people allowed in public places with face masks mandatory in restaurants and pubs.
Reports said the virus spread from hotel quarantine as Merlino stated that there is no alternative to hotel quarantine. The imposition of a seven-day "circuit breaker" is expected to slow down the virus.
Victoria had earlier entered a lockdown in February and has experienced lockdowns three other times earlier.
Health minister Greg Hunt and PM Scott Morrison backed Victoria's proposal of quarantine as the government said it was looking to set up facilities containing 200 beds.
The increase in the number of cases come amid reports of slow vaccination in the country with 75,000 people being vaccinated per day even as the country has recorded just 30,000 COVID-19 cases and 910 deaths since the pandemic began last year.
Australia had imposed strict rules when the pandemic first began last year while closing its borders for non-citizens and permanent residents in March, 2020.
PM Scott Morrison recently said those restrictions will continue this year as well and would remain in place until the middle of 2022.